A blog about developments in the nongovernmental, nonprofit, charitable sector in China.

Thursday, November 12, 2015

Update for January-June 2014: Legislative Progress and Continuation of a Clampdown

Looking
back at this update that I wrote for the International Center for
Not-for-Profit Law back in 2014, I see that I was on target about the Charity
Law although understandably pessimistic that a draft would appear in the next
year or so.I was also right in reading
the signals about upcoming regulation for international NGOs but failed to
anticipate the Xi Jinping administration’s embrace of national security priorities
in 2014, and what that embrace would mean for international NGOs in the form of
the Overseas NGO Management Law that came out in draft form in early 2015.

January-March 2014

In March
of 2014, the annual “two meetings” (lianghui) – the second session of the 12th
National People’s Congress (NPC) and the Consultative People’s Political
Conference (CPPCC) – were held in Beijing. The NPC session’s focus was on
introducing a legislative agenda to carry out the broad policy pronouncements
issued by the Third Plenum of the 18th Central Committee which met
earlier last November.According to
various sources, that agenda includes working on the revision of the
registration and management regulations for social organizations, the Charity
Law which has been in limbo for almost 10 years, and various other policies on
tax exemptions to encourage charitable donations, government procurement of
services, strengthening trust in charitable organizations through third-party
evaluations, improving transparency of foundations and nonprofits, and
promoting religious charitable activity.

1) Formulating a Charity Promotion
Law(cishan shiye cujin fa, 慈善事业促进法)
to regulate charitable organizations and undertakings. The
Charity Promotion Law has been referred to in other discussions in this Note as
the Charity Law. Li Liguo, Minister of Civil Affairs, recently revealed that
the Charity Promotion Law was placed on the NPC Standing Council’s agenda for
this year, although observers believe it will be several years before the Law
will be passed[1].

3) Relaxing and clarifying policies
regarding the development of civic charitable undertakings [民间慈善事业],
as well as giving tax breaks to promote those undertakings. In January of 2013,
the Ministry of Finance and State Administration of Taxation issued more clarification
on tax exemptions in the form of a Notice on Management Issues
Related to Determining Qualification for Tax-exempt Nonprofit Organizations.

The
spring months have been a tumultuous period for civil society in China. With
the launching of an unprecedented high-level anti-corruption campaign by the
new administration under President Xi Jinping, the 25th anniversary
of the June 4, 1989 protests looming, large-scale strikes at the IBM and Yue
Yuen shoe factories in Guangdong in March and April, and a number of bombings
and attacks in the spring that the Chinese government attributes to Uyghur
separatists, the security situation for civil society groups and activists
became increasingly tense. During the April-July period, a number of lawyers
and other civil society activists were detained or arrested and charged with
“gathering to create a public disturbance” and other crimes. The well-known
anti-discrimination NGO, Yirenping, had its Zhengzhou office
raided
in June and again in July. In addition, a number of Christian churches in the eastern province of
Zhejiang were demolished. The scope of these detentions and arrests was
substantial – some say unprecedented – and included groups and activists who
had not experienced repression in the past.

At
the same time, we continue to see some progress on the legislative front such
as the newly-revised Environmental Protection Law which allows a broader range
of NGOs to file environmental public lawsuits, mention of the Charity Law being
placed on the national legislative agenda, and signals about formulating
regulations for international NGOs.

On
April 24, 2014 the 8th meeting of the Standing Committee of the 12th National
People’s Congress approved the revised Environmental Protection Law which will
come into force in 2015. This Law went through several drafts. Earlier drafts
elicited criticism from civil society organizations because they placed narrow
restrictions on NGOs that were qualified to file environmental public interest
lawsuits. Thus, in the first two drafts of the law, only NGOs with close
government ties such as the All-China Environment Federation (a GONGO
established by the Ministry of Environmental Protection) were allowed to file
lawsuits. Following debates and suggestions, a third draft was presented in
August 2013 according to which new actors could file a lawsuit if they
respected the following conditions: being registered with a Civil Affairs
Bureau above the city level, being active for at least five years, and have “a
good reputation.”In the final draft, presented
in March of 2014, “good reputation” was replaced by “no record of illegal
activity,” thereby widening the scope of actors entitled to file public
interest environment lawsuits[2].

Reports also came out about the drafting of the Charity Law
which has been placed on the National People’s Congress (NPC) legislative
timetable. The NPC Domestic Affairs Legal Committee (全国人民代表大会内务司法委员会）has taken the
lead in the drafting of the Charity Law and is expected to submit it for
consideration in 2015 if the legislative process proceeds smoothly. Legal
scholars such as Jin Jinping, director of Peking University’s Civil Society
Research Center, spoke in favor of legislation protecting one’s right to engage
in charitable acts. She hoped that legislation should give communities more
freedom, and stressed that when considering legislation that has to do with
liability, supervision, management, and taxes, it was important to consider
whether the Charity Law would promote or “imprison” one’s right to do good[3].

There has also been more high-level
signaling that new regulations may be in the works that will make it easier
for international NGOs to gain legal status. In May of 2014, the newly-formed
National Security Commission headed by President Xi Jinping ordered a review
and investigation into the operations of international NGOs working in
China, particularly those with projects in rural areas. The text noted that the
investigation’s purpose was to “lay thefoundation for furtherstrengtheningstandardized management.” This
suggests that the investigation should be seen not so much as a crackdown on
international NGOs working in China, but as part of a broader initiative to
strengthen regulation over international NGOs which, in the past, have operated
largely without much government regulation or oversight. Given the 2013 news of
impending new regulations for international NGOs, it may very well be that this
investigation will help to shape the content of those new regulations.

These
positive legislative initiatives accompanied a wave of optimism following the
Third Plenum Decision of November of 2013 and the NPC meeting in March of 2014,
both of which signaled greater government support for civil society through the
moniker of “social governance.” But true to the Communist Party leadership’s
penchant for contradictions, these measures were followed quickly by a more
repressive period in which many civil society activists, lawyers and NGOs came
under greater scrutiny in the run-up to the 25th anniversary of the
June 4, 1989 protests and a substantial number were detained, investigated, harassed or arrested.